IP Ownership in an Employment Context: Patents vs Copyrights

Divya Subramanian, a bright young IP attorney with Lex Orbis, one of India’s leading IP law firms, wrote and asked me a very pertinent query pertaining to the ownership of IP created by an employee during the course of employment.

While the Copyright Act (section 17) states that absent a contract to the contrary, any work created in the course of employment belongs to the employer, the Patents Act does not carry a similar stipulation. Therefore, it would appear that absent an express contract, wherein all IP created by the employee belongs to the employer, patent rights ordinarily vest with the employee. Is there any reason for this differential treatment in the two regimes?

I personally think this is more of an oversight than anything else. If brought to the attention of our lawmakers, my guess is that an amendment to the Patents Act to bring it on parity with the copyright act would pass through without much of a problem. But perhaps there is a deeper reason underlying this difference that I have missed. And some of you could point us to it.

As an aside, this difference between the Patents and the Copyright Act appears to have played a prominent part in the Upaid v. Satyam dispute, which Sumathi tracked extensively on this blog. The Indian experts hired by both parties in this dispute (Himanshu Kane v. S Majumdar) testified on this difference, albeit reasoning differently to reach different conclusions.

Anyway, below is the text of Divya’s note and query to me:

“The aim of each of the IP regimes is undoubtedly to grant protection against misappropriation and monopoly on the fruits of labour invested on one’s Intellectual capital. In this endeavour, ownership of the IP and transfer of rights therein is crucial and pertinent.

One of the primary differences between Patents and Copyright (CR) is the manner in which a claim on them exists- A patent right not being acquired until a patent is granted by the IP Office , while a CR comes into existence the moment the creative piece of work comes into existence. Further, looking at an employer-employee scenario, a formal declaration as to one being the true and first inventor and an assignment is required to acquire a patent on an invention/process.

While, in a case where the course of employment involves creation of something that qualifies CR registration, the CR automatically vests in the employer. However, when the employer applies for CR registration (since CR automatically exists upon the work coming into existence, and the right as the first author of the work still rest with the employee), the employee is required to give a certificate of no objection to allow the employer to apply for CR. If this certificate is not filed, the application is considered incomplete. I wonder if the no objection certificate has the same force of law or effect as a deed of assignment in view of the fact that the author still has a right as a first author in the CRed work, but an inventor shall have no such right upon assignment of his invention to his employer for application for a patent.

While comparison across jurisdictions of a regime is pertinent, is it pertinent to compare and generalize/bring parity between practices across different types of IP? I am wondering … if we should bring parity in practices in the different regimes, or leave these independent, owing to an obvious difference in the subject matter covered under each IP. Further, particularly on the aspect of employer-employee relations vis-a-vis IP is there need to bring in uniformity? Or, is there something that this limitedly-enlightened mind misses? Would like to have some of your perspectives.”


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5 thoughts on “IP Ownership in an Employment Context: Patents vs Copyrights”

  1. Dear Shamnad,

    I would like to draw some comments on this as per as ownership of patent is concerned. During the course of employment whether there is a contract or not, any research work done on the invention during the course of employment with the employer and for which patent rights are sought, the ownership of patent lies with the employer and not employee, though the employee is the inventor of the invention. In case there is a contract which spells out clearly the ownership as to who will own the rights, that ownership will decide. In the current employments especially employees in R & D, the ownership lies with employer unless and until the employer has diluted its ownership in an formal agreement which spells out the ownership to employee. This however does not happen in practical term, wherein the contract spells out ownership terms to the employee during the course of employment, the contract generally makes it clear that any IP that emerges out on research work carried out by an employee, its ownership lies with employer.

    1. Dear Mr. Garg,

      Interesting how you point out that absence of a contract to the contrary any invention by an employee during course of his employment, ownership of such invention will belong to the employer. And I will presume that this is a confirmation that there is no need for a declaration/ assignment by the employee stating the same. However, I would like to ask you what is the basis of your conclusion (judgements, maybe).

  2. Hi Divya,
    A very pertinent question indeed! And why not, when there is an initiative to harmonize the substantive patent law in the form of SPLT (Substantive Patent Law Treaty), to bring into line the practices with respect to different IPs such as Patents and Copyrights may be a desirable one. But before this let us just repeat what Justice Pradeep Nandrajog spelt out as the rationale behind moral rights in Amar Nath Singh v. Union of India. [2002(2)ARBLR130(Delhi); 2005(30)PTC253(Del)], “In the material world, laws are geared to protect the right to equitable remuneration. But life is beyond the material. It is temporal as well. Many of us believe in the soul. Moral Rights of the author are the soul of his works. The author has a right to preserve, protect and nurture his creations through his moral rights.”
    So, do we face a situation like presence of a moral right in an invention when, suppose a scientist in a R& D center, effects an invention. Well, there may be an argument that an invention is a creation so is the presence of the moral right but is there really an extension of personality as in an author’s work? A patent is granted for the claims which describes the best method to work the invention, whereas, a Copyright is granted to certain “intellectual products” to prevent “copying” of these products. Immanuel Kant defended copyrights by treating an author’s works not as objects the benefits of which should accrue to the author, but rather as extensions of the personality of the author and subject to protection as such (http://www.compilerpress.ca/Competitiveness/Anno/Anno%20Hurt%20&%20Schuchman%20Econ%20Rationale%20Copyright.htm).
    In my opinion, the nature of IP plays a larger role in keeping the practices as they are currently. Lastly, your expression “limitedly-enlightened mind” describing yourself has set me thinking……

  3. Kamakhya,

    I think the fact that the inventor gets his name endorsed in the applicn as the true n first inventor somewhere takes care of his moral rights in the invention, which albeit are assigned to his employer/co. by means oif the assignment deed.

    In CR.. moral rights exist, by virtue of the author having a right as a first author. Further, he gives a no objection certificate to “copyright regn” by his employer, while the first strain of right and CR still rests in him. In Patents, the assignment of all the inventors rights… leads to the employer being responsible for the unstated moral rights as well.. IMHO.
    Wat is ur take on this???

    Further, I disagree that an invention cannot be an extension of one’s personality.. but i guess that is a diff debate altogether!!!

  4. what would be the scenario if a students develops a drug in his collage lab under the CSIR funding by the institute?
    who would be entitled for the ownership of the patent?

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